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Ask a Fool: What Is the Deal With Google's Stock Split?

By David Meier - Feb 24, 2014 at 4:30PM

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The real story behind Google's unconventional stock split.

In this video from the Motley Fool's "Ask a Fool" series, Fool analyst David Meier takes a question from a Fool reader, who asks, "What does Google's (GOOGL -5.21%) stock split mean and why is it creating a new class of shares?"

David takes a look into the unconventional upcoming stock split by Google that, rather than increasing the number of class A or class B shares that current shareholders hold, will instead give shareholders one share of the new class C shares for each class A or class B share they currently own.

The key reason behind this is voting rights: Class C shares will not entitle the holder to a shareholder vote like class A and B shares will. This achieves the desired effect of splitting the stock, while not diluting Sergey Brin's and Larry Page's control over the company by increasing the number of voters. While this has been seen as somewhat controversial and not shareholder-friendly by some, Dave believes strongly in the vision and ability to execute that Brin and Page have shown, and thinks that keeping the company firmly in their hands can only lead to bigger and better things for Google.

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